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Global shares jump despite further massive falls in China | Global shares jump despite further massive falls in China |
(about 2 hours later) | |
US and European shares have surged in Tuesday trading, despite another night of steep falls for China's market. | US and European shares have surged in Tuesday trading, despite another night of steep falls for China's market. |
On Wall Street, the Dow Jones was 2.5% higher, while the FTSE 100 closed up 3% and Germany's Dax and Paris Cac were both up more than 4%. | |
European markets had opened higher but were were further boosted after China's central bank announced it was cutting interest rates. | |
That followed two days of turmoil on China's stock markets. | |
On Tuesday the main Shanghai Composite index closed down 7.6% at 2,964.97 points, on top of Monday's losses. | |
Stock markets in Lisbon, Madrid and Milan, were all also strongly higher. | |
Follow our live coverage of global markets. | Follow our live coverage of global markets. |
"Today's move to cut interest rates... is certainly a step in the right direction," said Anna Stupnytska, global economist at Fidelity Worldwide Investment. | |
"But while this might help sentiment, it is not enough to reverse the ongoing slowdown in China's growth. Some stabilisation in activity is probably the best case scenario. A sharp rebound is unlikely," she added. | |
The volatile moves in the markets has raised speculation that the Bank of England may delay an interest rate rise. | |
However, Paul Hollingsworth, UK economist at Capital Economics, said: "Although the UK has clearly been caught up in the recent meltdown in global financial markets, we doubt that it will knock the economic recovery off course. | |
"That said, it provides the more cautious members of the [monetary policy committee] with another reason to hold fire on voting to raise interest rates." |